On April 1, 2020, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) issued a non-binding general policy statement (“Policy Statement”) regarding the Fair Credit Reporting Act (FCRA) and Regulation V in light of the recently enacted Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
The CFPB’s Policy Statement highlights furnishers’ responsibilities and informs consumer reporting agencies (“CRAs”) of the Bureau’s flexible supervisory and enforcement approach during this pandemic. The Bureau intends to consider the circumstances that entities face as a result of the COVID-19 pandemic and their good faith efforts to comply with statutory and regulatory obligations as soon as possible.
The Bureau believes that this flexibility will help furnishers and CRAs to manage the challenges of the current crisis. Below are examples of the flexibility the Bureau intends to provide in the consumer reporting system.
Furnishing consumer information impacted by COVID-19: The Bureau reiterates its prior guidance encouraging financial institutions to work constructively with borrowers and other customers affected by COVID-19 to meet their financial needs. While companies generally are not legally obligated to furnish information to CRAs, the Bureau encourages them to continue doing so despite the current crisis. Furnishers’ providing accurate information to CRAs produces substantial benefits for consumers, users of consumer reports, and the economy as a whole. The CARES Act, a section of which amends the FCRA, generally requires furnishers to report as current certain credit obligations for which furnishers make payment accommodations to consumers affected by COVID-19 who have sought such accommodations from their lenders. Many furnishers are or will be offering consumers affected by COVID-19 various forms of payment flexibility, including allowing consumers to defer or skip payments, as required by the CARES Act or voluntarily. Such payment accommodations will avoid the reporting of delinquencies resulting from the effects of COVID-19. The Bureau supports furnishers’ voluntary efforts to provide payment relief, and it does not intend to cite in examinations or take enforcement actions against those who furnish information to CRAs that accurately reflects the payment relief measures they are employing.
Disputes: The FCRA generally requires that CRAs and furnishers investigate disputes within 30 days of receipt of the consumer’s dispute. The 30-day period may be extended to 45 days if the consumer provides additional information that is relevant to the investigation during the 30-day period. The Bureau is aware that some CRAs and furnishers may face significant operational disruptions that pose challenges in the investigations. For example, some CRAs and furnishers may experience reductions in staff, difficulty in taking disputes, or lack of access to necessary information, rendering them unable to investigate the disputes within the timeframes the FCRA requires. Furnishers include a wide variety of businesses that vary in size and sophistication and can range from small retailers to very large financial services firms, each of which will face unique challenges due to the COVID-19 pandemic. In evaluating compliance with the FCRA as a result of the pandemic, the Bureau will consider a CRA’s or furnisher’s individual circumstances and does not intend to cite in an examination or bring an enforcement action against a CRA or furnisher making good faith efforts to investigate disputes as quickly as possible, even if dispute investigations take longer than the statutory timeframe. The Bureau reminds furnishers and CRAs that they may take advantage of statutory and regulatory provisions that eliminate the obligation to investigate disputes submitted by credit repair organizations and disputes they reasonably determine to be frivolous or irrelevant. The Bureau will consider the current constraints on furnishers’ and CRAs’ time, information, and other resources in assessing if such a determination is reasonable.
Regulatory requirements: The Policy Statement is a non-binding general statement of policy articulating considerations relevant to the Bureau’s exercise of its supervisory and enforcement authorities. It is therefore exempt from the notice and comment rulemaking requirements under the Administrative Procedure Act pursuant to 5 USC 553(b).
Resources for consumers and small businesses facing the impacts of the COVID-19 pandemic are available on the Bureau’s website at https://www.consumerfinance.gov/coronavirus/.